The Hidden 3 Percent Fee in Government Payment Cards

The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending · Jun 18, 2026 · 7m · transcript

Episode 59 of The Fiscal Policy Podcast digs into the small but expensive fees that state and local governments pay on every electronic benefits transaction — from EBT cards to unemployment debit cards. Each swipe costs taxpayers roughly 3 percent in interchange fees, adding up to over $1.5 billion a year nationally. Lucas and Luna examine how New York state recently cut its payment-card cost by 40 percent by switching to a low-fee provider and renegotiating its contract. They also explore why most governments haven't followed suit — the opacity of payment processing contracts, the cozy…